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Brazil’s Bolsonaro extends tax breaks for labor-intensive industries -Breaking

by Mike Robinson

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© Reuters. FILE PHOTO – Employees working at a building site during the COVID-19 outbreak in Sao Paulo Brazil, March 30, 2020. Picture taken March 30, 2020. REUTERS/Rahel Ptrasso

RIO DE JANEIRO – Brazilian President Jairbolsonaro approved a bill which extends the payroll tax exemptions to 17 sector of the economy to help boost job creation. The decision was made public in the official gazette on Friday night.

This exemption, which was renewed for two more years, is now available until the end of 2023. It benefits, among other things, meatpackers and civil construction workers.

According to the measure, businesses can decide not to pay social security contributions calculated on payrolls and instead contribute according to their gross income. The president’s staff notes that this provides companies with a higher incentive to employ staff.

To make up the deficit, the government must find new sources of revenue.

Alternatives are to extend the financial transaction tax surcharge (IOF) through 2023 or keep the so-called CSLL levy from banks at a high rate.

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